Influence of informal financial literacy training on financial knowledge and behavior of rural farmers: Evidence from Uganda

Financial literacy plays an important role in influencing financial behavior and knowledge of individuals.
In this study, the impact of informal financial literacy training on rural smallholder farmers was
assessed. Propensity score matching approach was used to assess training effects on distinct
dimensions of financial knowledge. The study used a sample of farmers who are members of village
savings and loans associations. Findings indicate higher scores (70.6% for training beneficiaries and
68.5% for the control group) in financial goals and the lowest scores (48.0% for training beneficiaries
and 43.0% for control group) in planning and managing finances. Although the descriptive statistics
show higher scores for the trained farmers, overall financial literacy scores in the different dimensions
for trained farmers were not significantly different from those that were not trained. The result was
attributed to spillover effects through networks given the period between training and evaluation. More
financial education programs could be useful to empower communities with knowledge for informed
financial decision making.
Key words: Financial literacy, financial decisions, smallholder rural farmers, informal training

Renzaho Proscovia Ntakyo, Mugisha Johnny, Bangizi Robert, Namwanje Diana, Kalyebara Robert

EfD Authors

Mugisha, Johnny

Sustainable Development Goals

No Poverty

Zero Hunger